Good Governance : Ethical CEOs take action
Rebecca Barnett is an author and motivational speaker on character-centered leadership. Rebecca has a dozen years of executive experience with American’s most admired and aggressive retailers, including The Home Depot and The Limited. Drawing on her research and corporate experience, Rebecca offers practical, pragmatic, experienced solutions. She is a national referee and black belt in the Olympic sport of Judo. She is a Silver medallist in the 2001 World Masters Championships.
As we approach the two year anniversary of the Enron accounting scandal and subsequent collapse, the press picks through the skeletal remains what used to be the 7th largest company in America. We have learned some hard lessons. We know that when the stakes of money, power and stock options are high, it brings out the best and worst in human behavior. We have learned that accounting fraud has a real cost measured in the thousands of jobs lost and the bitter bear market.
Two years after the first whiff of scandal, formerly esteemed CEOs at Enron, MCI WorldCom and Tyco still face criminal prosecution. As indictments are handed to lesser executives, we learn more details of wide spread corporate corruption, blind ambition and bottomless greed. A handful of badly behaving executives have given millions of business leaders a black eye. A Gallup poll showed that only 17% of Americans believed in executives’ honesty and ethics.
The big three scandals from 2002, Enron, MCI WorldCom and Tyco, comprise only 5% of the S&P 500, but have negatively impacted the other 95% of companies who didn’t cook the books or go bankrupt. The recession stubbornly lingers and unemployment rate rises with every layoff razor cut. The stock market makes a feeble rally, retreats, and rallies again, eking out small gains.
Two numbing years filled with screaming headlines of corporate scandals has taken a heavy toll in corporate confidence and sent stock prices spiraling downward. Cordial press relationships have turned hostile. Fawning media coverage has been replaced with aggressive questioning; even innocent business leaders have been painted with the broad brush of suspicion. Most CEOs have kept their silence, retreating to the safety of board room. Since the accounting scandals began two years ago, we no longer look to CEOs as examples of integrity.
But as we approach the Enron anniversary, this is the time to turn the tide of public opinion, to correct the misperception that CEOs are a bunch a crooks. Now is the opportunity for ordinary leaders of high integrity to step forward and open their company books and operations to the bright lights and intense scrutiny of the media. It is up to the other 95% of ethical CEOs to restore confidence in corporate leadership and faith in our financial markets.
© Copyright 2003 by Rebecca Barnet. All rights reserved.